special - Alu-web.de

ALUMINIUM SMELTING INDUSTRY
Primary aluminium industry during the first half of 2013, Part I
Rudolf P. Pawlek, Sierre
© Alcoa
This overview covers the events of the
primary aluminium industry during the
first half of 2013. Part I focuses on the
regions Africa, America, Oceania and
Europe while Part II, which will be published
in our next issue, will look at the
Middle East and Asia.
In January Alcoa announced it expects aluminium
demand to increase by 7% to 49.4m
tonnes in 2013, up 1 percentage point from
the 6% growth seen in 2012. The bump in
global demand will be bolstered by an 11%
expansion in demand from China, as well as
strong growth from Brazil (3%), Russia (1%)
and India (3%). The change in demand from
North America and Europe should remain
relatively similar to 2012, with North America
seeing a 4% increase in demand (equal to the
2012 growth figure) and European demand,
which fell by 2% in 2012, declining by just
1% year-on-year in 2013. As a result of the
expected demand growth, Alcoa is projecting
a 200,000-tonne alumina deficit and a
535,000-tonne aluminium surplus in 2013.
Given the size of these markets, however, the
figures show that supply and demand are essentially
balanced. Alcoa also predicts a recovery
in LME prices, linked more to the global
economic situation than to market fundamentals.
Chinese output will reach 23.35m tonnes,
while its demand will be 23m tonnes, leaving
a small surplus which has grown from 100,000
tonnes in 2012. In the rest of the world, production
of primary aluminium output will be
26.61m, with demand forecast to be 26.42m
tonnes.
In May Alcoa announced that it will review
460,000 tpy of smelting capacity over
the next 15 months for possible curtailment
to secure the company’s competitiveness, as
aluminium prices have fallen more than a third
since their peak in 2011. Rusal and Chalco
have announced production cuts too. Rusal
will reduce primary aluminium production by
300,000 tonnes by year-end, and Chalco said
it would temporarily close 380.000 tpy of production
capacity.
AFRICA
Alcoa will close two Søderberg potlines at its Baie-Comeau smelter in Quebec
GUINEA: In March Russian aluminium giant
Rusal quietly abandoned plans for a multibillion-dollar
aluminium smelter in Guinea.
NIGERIA: In mid-March, the Alscon board
of directors decided to suspend aluminium
production at the plant. Previously, Rusal had
covered the plant’s losses, expecting to find
a sustainable gas supply which would enable
Alscon to operate at its full capacity. Despite
all measures undertaken by Rusal, Alscon does
not have a reliable and continuous gas supply.
Aluminium production at the plant is deeply
loss-making, which renders it impossible to
fully utilise the existing capacities. However,
Alscon will continue to generate electricity.
During the suspension period, the main ef-
forts of Rusal will be focused on securing continuous
gas delivery, obtaining judicial determination
that Rusal is the rightful owner of
Alscon, and preparing to restart operations.
Smelting will resume as soon as the legal uncertainty
has been resolved and the continuous
power supply has been secured.
In July Nigeria’s supreme court ruled that
former state-owned Alscon should have been
sold to a US-based firm, not to Rusal, but did
not question Rusal’s ownership. Rusal acquired
a 75% stake in Alscon in 2007 and now
owns 85% of its assets.
AMERICA
BRAZIL: In January Brazil announced it
would cut electricity costs by more than a
third across different sectors. Electricity tariffs
for industry, agriculture and retail would
be reduced by 32% while the reduction was
18% for residences. The cut is larger than the
16.2% for residences and 28% for industries
announced in September 2012. The impact of
the reductions will amount to an additional
expenditure of 8.46bn Reais (USD4.14bn).
The energy cost for Brazil’s aluminium industry
is 329 Reais per MWh (USD161/MWh)
on average, according to the industrial federation
of Rio de Janeiro. This is much higher
than China’s average electricity rate, equivalent
to 142 Reais per MWh (USD69/MWh).
Rates of 27 countries compared averages
about 215.5 Reais per MWh (USD105/MWh).
The country also plans to double its installed
capacity over the next 15 years from
the present 121,000 MW. Last year, about
4,000 MW and 2,700 kilometres of transmission
lines were installed. For 2013, the objective
is to install another 7,500 kilometres of
transmission lines and generate additional
8,500 MW of energy.
CANADA: In May Alcoa announced the
permanent closure of two older potlines at
its Baie-Comeau smelter in Quebec, and to
postpone the construction of a new potline by
three years as it looks to cut costs. The two
Søderberg potlines, which have a capacity of
105,000 tpy, are scheduled to be closed by
August. Restructuring charges related to the
closures are forecast to be USD135-155m
after tax in 2013. The potline closures come
after Alcoa announced to cut as much as
460,000 tpy of smelter capacity globally over
the next 15 months in the face of low alu-
30 ALUMINIUM · 7-8/2013
303 innovatherm 06/2013